Following reports from Develop, that UTV owned  gaming company Ignition Entertainment, has made 30 employees redundant, and is planning to shut down its WarDevil project, UTV has informed MediaNama that War Devil is in advanced stages of development, and key activities have been outsourced: “We are entering the advanced stage of War Devil and so as each phase of the Game gets complete there is a normal phasing out process. Furthermore we have also outsourced certain key activities overseas and that was in the plan. The studio at Ealing is very active and on track for War Devil”, the company said, via email.

Develop had reported that Ignition’s CEO Vijay Chadha has been absent for around three months’, and we’ve asked UTV for further clarifications on layoffs and whether Chadha is still with the company. Earlier, there had been reports that Ignition would shut down its London office, though that was later denied.

UTV had said in July that War Devil’s release was being pushed forward by 6-9 months, “taken opportunity to pace release so as not to offer 3 IPs for pre sale in one year”; two gaming IPs – El Shaddai and Reich are expected to be released this fiscal. Strange, then, that it should push back the project that has been in the works for 5 years.

As of the quarter ending June 30th 2010 (financialsreport), UTV had invested Rs. 555.85 crore in the gaming business; updated figures are not available since UTV changed its reporting pattern for the July-September 2010, combining reporting for Interactive and Gaming businesses. In terms of investment, much of it has been in the Ignition, its console gaming business.

In July, the company had said that Ignition needs more funds, and it was going to explore the option of bringing a strategic investor on board, through equity dilution. The gaming business, though similar in some ways to the movie business that UTV is familiar with, requires much more investment – in development, distribution and marketing. One rule, though, remains the same – the entire investment can come to naught if the game doesn’t do well.

According to UTVs estimates, they need to reach 1 million units per game to break even – around 165,000 units/ per platform (PS3 & XBOX 360), per 3 main territories (USA/Japan/EU & UK). The company expects Rs. 80 crore from publishing of Ignition games this fiscal.

UTV owns three gaming business – Ignition, True Games, and Indiagames, across the multiple gaming segments: console and PC game development, Massively Multiplayer Online Games, and mobile games and distribution. Indiagames turned a profit in the last quarter, but the other two businesses have been long in gestation.